Question 1: A student working on a summer internship in the economic research de

Question

Question 1: A student working on a summer internship in the economic research department of a large corporation studied the relation between sales of a product (Y, in million dollars) and population (X, in million persons) in the firm's 50 marketing districts. The normal error regression model was used. The student first wished to test whether or not a linear association between Y and X existed. The student accessed a statistical package and obtained the following information on the regression coefficients Parameter Intercept Slope Estimated Value 7.43119 0.755048 95% Confidence Limits 1.18518 16.0476 0.452886 1.05721 The student concluded from these results that there is a linear association between Y and X. Is this conclusion warranted? What is the level of significance? a. Someone questioned that the negative lower confidence for the intercept, pointing out that dollar sales cannot be negative even if the population in a district is zero. Discuss. b. Question 2. A member of a student team playing an interactive marketing game received the following computer output when studying the relation between advertising expenditures (X) and sales(Y) for one of the team's products: Y=350.7-0.18x Two sided-p-value for testing if =0 or not-0.91 The student stated that:" The message I get here is that the more we spend on advertising this product, the fewer units we sell" Comment on this.

Explanation / Answer

dear student please post the question one at a time .

1) a) Yes, the conclusion is warranted. The confidence interval for the slope does not contain 0, so at .05 level of significance, the slope is significantly different than 0.

b)The value of X = 0 is not within the scope of the model so it is not important if the interval contains negative numbers. When 0 is not within the scope of the model, the intercept coefficient has no interpretation.

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